What Is an Ohio Mortgage Broker Bond?
Mortgage brokers in Ohio, just like in most states, have to obtain a state license. A major requirement in this process is to post a mortgage broker bond.
The Ohio surety bond you provide serves as an additional guarantee for your legal compliance as a broker. If a party suffers damages due to illegal actions on your part, you may end up with a bond claim. That’s how they can seek a fair compensation.
The bond you post to get your Ohio mortgage broker license is a contract between three entities. Your mortgage brokering business is the principal that needs the bond. The Ohio of Department of Commerce is the obligee that requires the bond. The third party is the surety, which provides the bond.
What are the factors that shape your surety bond cost? Your surety has to assess the strength of your personal and business finances. It examines your personal credit score, business financials, and assets and liquidity. In this way, it is able to judge the level of bonding risk. The more stable your profile is, the less you’re likely to pay to get bonded.
|Surety bond name||Surety bond amount||Above 700||Between 650-699||Between 600-649||Below 599|
|Ohio mortgage broker bond||$50,000 to $150,000||$375-$750 to $1,125-$2,250||$500-$1,250 to $1,500-$3,750||$1,250-$2,500 to $3,750-$7,500||$2,500-$5,000 to $7,500-$15,000|
Questions about Mortgage Broker Bonds in Ohio
In which situations do you need this bond?
Getting your state license as a mortgage broker in Ohio means you need to post a surety bond between $50,000 and $150,000 in the official bond form. You have to apply through the website of the Nationwide Multistate Licensing System & Registry (NMLS), but the licensing authority is the Ohio Department of Commerce.
Your Ohio mortgage broker bond ensures you will follow the Ohio Mortgage Broker Act, as well as any other applicable rules. You have to renew it every year before December 31st, and keep it active at all times during your licensing.
What is the bond price?
The bond amount that you have to obtain is between $50,000 and $150,000. It should be 0.5% of your loan origination volume for the previous year. What you pay to get bonded, however, is only a few percents of that amount. It is called the bond premium. Typically, it is between 1% and 3% if your overall application is solid.
Can I get an Ohio mortgage broker bond with bad credit?
It is possible to obtain the bond you need even with problematic finances. Lance Surety Bond has designed its Bad Credit Surety Bonds program for applicants with credit score, tax liens, bankruptcies, and civil judgements.
Rates of about 5%-10% are usual for this program. This is needed to mitigate the higher bonding risk. Since we collaborate closely with a number of A-rated, T-listed surety companies, we are able to offer you excellent bonding options even if your credit is far from perfect.
How do I apply for bonding?
Do you want to learn more details about the bonding process and the principles of bonding? Make sure to review our extensive How to Get Bonded page.
You can also contact us for further questions or if you need help with your application. Just call us at (877) 514-5146, and we will assist you.
What happens if I get a bond claim?
Your Ohio mortgage broker bond does not protect your business. Instead, it guarantees your legal compliance and in this way, safeguards the interests of the state and the general public. If a customer is harmed as a result of your illegal or unethical actions, they can file a claim against your bond. They can get a compensation up to the penal sum of your bond.
When a claim is proven, you have to reimburse the claimant. At first, your surety may take over the payment to ensure a fast process. However, you have to fully repay it soon after. This makes claims a heavy financial burden that is best to be avoided.